Jonal Laboratories Ready For Aerospace Growth

Jonal Labs in Meriden makes rubber and silicone seals, diaphragms and O-rings, for use in both aircraft engines and on airframes. They also make rubber seals coated with high-tech fabrics, for better aerodynamic performance.

Family-owned company makes seals for aircraft engines and bodies, International Space Station

MERIDEN — Jonal Laboratories hired a chemist, bought equipment and rented another 11,000 square feet, expecting a wave of work from new commercial and military engine programs at Pratt & Whitney and the ramp up of production of Boeing's Dreamliner.

"The wave hasn't hit the shore here," said Marc Nemeth, the company's president and son of the founder.

Nemeth, 63, said that years ago, Pratt said it would be doubling and tripling its capacity by now. "That's pushed out to the right," he said, meaning into the future. "We've been ready since 2012."

Carrying people they don't need and paying rent on idle space has hurt margins in recent years. But Nemeth said that's what the good years are for, to put aside capital assets to use when you need to invest for an expansion.

Jonal makes rubber and silicone seals, diaphragms and O-rings, for use in both aircraft engines and on airframes. They also make rubber seals coated with high-tech fabrics, for better aerodynamic performance.

O-rings can sell for as little as a few dollars each, while other seals cost $40 to $80 each.

The low-cost parts are not a growth segment, and the company has had to exit some of that work over the past two decades. Nemeth, who employs about 68 people, said at one time there were 113 workers at Jonal. At one time, there were three shifts, too. Now there's one, of four 10-hour days.

The company had about 75 people in 2003, fell to the low 50s in 2009, and has been at its current employment level for two years.

"There are jobs we used to do we cannot do because the margin is not enough anymore," he said. He blames state policy in part, and scoffs at the business-friendly claims of the administration.

"Taxes are not a problem," Nemeth said — it's utilities, the workers' compensation system and unemployment compensation taxes.

As a result, Jonal no longer hires production workers directly. Instead, it uses staffing firms to hire people for a 3- or 6-month term, and if they work out — more than half do — they come onto payroll.

Ken Keegan, executive vice president at Jonal, said, "We start people well above even what they're proposing as minimum wage."

"If they make it through the first couple months, they're here a long, long time," Nemeth said.

The company is trying to move up the value chain, not just in item costs, but also by getting involved with new parts as they're just being designed. When the company advises on the right chemical mix for the silicone, it's much more likely to be the supplier for the part than when it bids on replacement seals for engines that have been around for decades.

Nemeth said he expects a third of the business in the future to come from these kinds of collaborations.

By contrast, when it bids on seals or O-rings as a job shop, it gets the work less than 25 percent of the time. Other companies are just cheaper.

Nemeth let a note of frustration creep into his voice as he asked how the manufacturers can talk about how important on-time delivery and quality are to them, when they select companies that are cheaper but fail to deliver on schedule.

The company proudly hangs banners from Raytheon that mark the company as a 5-star supplier, a quality, delivery and safety record that the giant defense contractor recognizes at fewer than 20 of its thousands of suppliers.

"We can turn around in four or five weeks what someone else was supposed to turn around in 16 weeks," Keegan said. He said they have gotten jobs where the original supplier failed to deliver.

United Technologies Corp. is Jonal's biggest customer, for parts on helicopter bodies, seals in engines and even spacesuit seals. Pratt & Whitney, based in East Hartford, is a division of UTC.

"Jonal Laboratories has been a supplier to P&W for more than 25 years and has demonstrated they can meet our delivery, quality and performance requirements," said Julie Cabrera, a Pratt spokeswoman. "Suppliers such as Jonal Laboratories play an important role in our supply chain."

She alluded to future orders on the books for its new commercial engine design and said, "We have more than 90 product suppliers in Connecticut and we are working to ensure the most technically advanced and high-performing suppliers have an opportunity to be part of our growth story.

In addition to UTC, Boeing and Rolls-Royce are also customers, and Nemeth and Keegan hope to break into selling to Electric Boat, Bombardier, Airbus and Snecma, a French aerospace engine manufacturer that partners with General Electric.

Jonal diversified into commercial airframe work about eight years ago. Aircraft seals — some as large as 8 feet by 8 feet — are now 30 percent of the business.

"We've supplied quotes" to some of those potential customers, Nemeth said, but it's a slow process to break in with a new customer.

"My immediate challenge is to get the levels of sales up," he said. Over the past three years, sales have been "marginally up, agonizingly slow," he said. Keegan estimated sales go up about 5 percent a year.

Jonal's revenue has not returned to its 2007 peak. Nemeth said the business does between $5 million and $10 million in sales. But he predicts Jonal will surpass the $10 million mark before the end of the decade, because he believes the company will start winning more work as the ramp-up hits.

Nemeth and Keegan said they are already seeing the pendulum swing back some toward valuing the ability to deliver reliably and away from the cheapest bid.

Nemethalso expects that companies will have to start paying more for legacy parts. To this point, manufacturers have been aggressive about demanding price reductions on those parts. Already, he sees bigger competitors refusing to bid jobs.

"I believe we're going to triple our business in three to five years," Nemeth said.